Magazine article International Trade Forum
Trade Law: New Practices Improve Business Confidence
Today's legal approaches aren't keeping pace with the huge rise in international business.
While trade barriers are falling, legal barriers are not. The number of countries has more than tripled in the past 50 years. Businesses find themselves dealing with more individual countries, each with their own commercial laws and legal systems.
If there are more borders to cross, there's also more cross-border business. During the last 15 years, world exports for goods have grown on average 6% a year.
Twenty years ago, people often associated business law with a particular nation. Today, they cannot afford to. A variety of international trade rules and practices--often outside the scope of national law--are shaping the way trade is conducted.
Where legal systems have not evolved, investors operate in a climate of uncertainty. In the last decade, many developing countries have become WTO members; yet few have ratified more than 30% of the world's 200 most important trade treaties.
All business people know deals can go wrong, no matter how tightly negotiated. With more deals being done, more cases are finding their way to the courts. Countries that haven't invested in alternatives to court trials are seeing backlogs of cases, with associated high costs and lost business opportunities.
New arbitration and mediation centres can lack experience and credibility in the business community.
With different business and legal cultures and practices across the world, small firms need help to export in terms they and their foreign business partners understand. Most cannot afford lawyers. Nor can they afford to isolate themselves from international trade.
We need new ways to facilitate business deals, settle disputes and create secure legal environments that attract foreign partners. …